Governors Bemoan Steep Slide In State Revenues At the annual meeting of the National Governors Association, one hot topic was how badly states have been hit by the economic downturn; this year, they've seen the steepest decline in tax revenues on record.
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Governors Bemoan Steep Slide In State Revenues

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Governors Bemoan Steep Slide In State Revenues

Governors Bemoan Steep Slide In State Revenues

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LINDA WERTHEIMER, host:

It's MORNING EDITION from NPR News. I'm Linda Wertheimer.

STEVE INSKEEP, host:

And I'm Steve Inskeep. Good morning.

The nation's governors could be forgiven if they found themselves in a certain kind of conversation over the weekend. It's that conversation where you complain about your problems, but no matter what you say, somebody else cuts in with a problem that tops yours. The governors gathered in Mississippi amid the steepest decline in tax revenue on record. It is affecting state after state. On Friday, we heard from Pennsylvania's Ed Rendell, whose budget problems are so severe he didn't even show up for the meeting.

This morning, NPR's Debbie Elliott reports on the governors who did.

DEBBIE ELLIOTT: Governors were served up a gospel brunch with oysters and grits yesterday morning.

(Soundbite of song, "Just a Little Talk with Jesus")

Unidentified Man: (Singing) I once was lost in sin, but Jesus took me in, and let a little light from heaven fill my soul.

ELLIOTT: That respite after a day of singing the budget blues. The National Governors Association reports a 24 percent decline in state revenues this year. And West Virginia Democrat Joe Manchin warns there's more to come.

Governor JOE MANCHIN (Democrat, West Virginia): We're projecting shortfalls collectively again in the next several years of more than $200 billion - $200 billion that we will be facing even with the assistance that we receive.

ELLIOTT: That assistance being federal economic stimulus funds. Governors from both political parties had praise for the money they got for education, Medicaid, energy efficiency and shovel-ready infrastructure projects, although many said they would have liked more flexibility on where to spend it. The group's chairman, Democrat Edward Rendell of Pennsylvania, missed the meeting because of a fiscal crisis back home. But in video-taped remarks, he said many states would have been swamped financially without the stimulus. Democrat Christine Gregoire says that was the case in Washington State.

Governor CHRISTINE GREGOIRE (Democrat, Washington State): I don't know what we would have done without it, to be perfectly honest with you, in terms of being able to come to a budget with a deficit that we were facing, ask the voters for no new revenue and get home on time. The federal stimulus dollars were key to that.

ELLIOTT: The incoming chairman of the Governors Association, Republican Jim Douglas of Vermont, says while the cash infusion from Congress has helped, states face hard work ahead to figure out what they're going to do when the money runs out in 2011.

Governor JIM DOUGLAS (Republican, Vermont): In Vermont, a quarter of our population is on Medicaid. So, it was particularly welcome to shore it up over the next couple of years. But we have to restructure our state governments. We have to restructure our economies so that we are ready to get along without these federal resources in a couple of years.

ELLIOTT: There appears to be little appetite here for another stimulus package.

Governor HALEY BARBOUR (Republican, Mississippi): Put me down for no.

ELLIOTT: Mississippi Republican Haley Barbour.

Gov. HALEY BARBOUR: We're up on a very high peak that we're got to have to get down off of when the stimulus money runs out. But pushing that off another year or two years is not the answer, because the people don't have the money to give us.

ELLIOTT: New Mexico Democrat Bill Richardson says it's best to give the current stimulus a chance to work.

Governor BILL RICHARDSON (Democrat, New Mexico): Before we start thinking of another stimulus, let the states work out the two years that are needed for the first stimulus package. I'm worried about the deficit. And I think we got to be careful about another stimulus package right now, because I think the first stimulus package is working, and we should let it run its course.

ELLIOTT: The governors hope the economy turns around by then, and that Congress doesn't burden them with paying for an expansion of Medicaid as part of health care reform. Incoming NGA Chairman Jim Douglas of Vermont.

Gov. JIM DOUGLAS: What we don't want from the federal government is unfunded mandates. We're facing the fiscal and economic challenges that we've described already this morning. We can't have the Congress impose requirements that we're forced to absorb beyond our capacity to do so.

ELLIOTT: The governors say they favor expanding health coverage, but can't pay for it. They're expected to vote on a resolution today expressing their concerns.

Debbie Elliott, NPR News, Biloxi, Mississippi.

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